PROSPECTUS INVESTOR CLASS SHARES MAY 1, 2006
TRANSAMERICA PREMIER FUNDS INVESTOR CLASS SHARES Prospectus: May 1, 2006 Equity Funds Transamerica Premier Focus Fund Transamerica Premier Equity Fund Transamerica Premier Growth Opportunities Fund Transamerica Premier Diversified Equity Fund Combined Equity & Fixed Income Fund Transamerica Premier Balanced Fund Fixed Income Funds Transamerica Premier High Yield Bond Fund Transamerica Premier Cash Reserve Fund The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.
TABLE OF CONTENTS Transamerica Premier Funds in Detail 1 Premier Focus Fund ********************************** 2 Premier Equity Fund ********************************* 6 Premier Growth Opportunities Fund ********************** 9 Premier Diversified Equity Fund ************************* 13 Premier Balanced Fund******************************** 17 Premier High Yield Bond Fund ************************** 21 Premier Cash Reserve Fund **************************** 25 Shareholder Information ************************************** 27 The Investment Adviser ******************************* 27 Advisory Fees ************************************** 27 Opening an Account********************************** 29 Buying Shares ************************************** 30 Selling Shares ************************************** 31 Exchanging Shares*********************************** 32 Redemption Fees ************************************ 33 Involuntary Redemptions ****************************** 33 Features and Policies ********************************* 33 Pricing of Shares ************************************ 36 Distribution of Shares ******************************** 37 Underwriting Agreement ****************************** 37 Distributions and Taxes ******************************* 37 Summary of Bond Ratings ***************************** 39 Financial Highlights********************************** 40 Appendix A *********************************************** 44 Additional Information and Assistance **************************** Back Cover Listed in this prospectus are the investment objectives and principal investment strategies for the Transamerica Premier Funds Investor Class shares (each a Fund, and collectively the Funds ). The Funds are managed by Transamerica Investment Management, LLC ( TIM or Investment Adviser ). The Funds investment objectives and strategies are non-fundamental which means that the Board of Directors may change a Funds investment objectives and strategies without shareholder approval. As with any investment, there can be no guarantee that any Fund will achieve its investment objectives. An investment in the Funds is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency; consequently, loss of money is a risk of investing in the Funds. Please read this prospectus carefully before you invest or send money. It has been written to provide information and assist you in making an informed decision. If you would like additional information, please request a copy of the Statement of Additional Information ( SAI ) (see back cover). In addition, we suggest you contact your financial professional or a Transamerica Premier Customer Services Representative, who will assist you.
Transamerica Premier Focus Fund market instruments. Although the Fund would do this only in seeking to avoid losses, the Fund may be unable to pursue its 2 Objective investment objective during that time, and it could reduce the benefit The Fund seeks to maximize long-term growth. from any upswing in the market. Principal Strategies and Policies Principal Risks The Fund invests primarily in domestic equity securities that, in the Your primary risk in investing in this Fund is you could lose money. Investment Adviser s opinion, are trading at a material discount to The value of equity securities can fall due to the issuing company s intrinsic value. Intrinsic value is determined primarily through poor financial condition or poor general economic or market discounted cash flow analysis, though acquisition and comparable conditions. Because this Fund invests in equities, its performance company valuation analyses may be used to a lesser extent. The may vary more than fixed-income funds over short periods. Fund generally invests in a non-diversified portfolio of domestic This Fund is non-diversified. As a non-diversified investment equity securities of any size. A non-diversified portfolio has the company, the Fund can invest a larger percentage of assets in a ability to take larger positions in a smaller number of issuers. To the smaller number of individual companies than a diversified extent a portfolio invests a greater portion of its assets in the investment company. As a result, any single adverse event affecting securities of a smaller number of issuers, it may be more susceptible a company within the portfolio could negatively impact the value of to any single economic, political or regulatory occurrence than a the Fund s performance more than it would for a diversified diversified fund and may be subject to greater loss with respect to investment company. its portfolio securities. However, to meet federal tax requirements, at the close of each quarter the portfolio may not have more than 25% The value approach to investing carries the risk that the market will of its total assets invested in any one issuer, and, with respect to not recognize a security s intrinsic value for a long time, or that a 50% of its total assets, not more than 5% of its total assets in any stock judged to be undervalued may actually be appropriately one issuer. priced. The Investment Adviser uses a bottom up approach to investing. Because the Fund can invest in companies of all sizes, it may be It studies industry and economic trends, but focuses on researching exposed to the risk of investing in small- and medium-sized individual companies. The portfolio is constructed one company at a companies. Investing in small- and medium-sized companies involves time. Each company passes through a research process and stands greater risk than is customarily associated with more established on its own merits as a viable investment in the Investment Adviser s companies. Stocks of such companies may be subject to more abrupt opinion. or erratic price movements than larger company securities. Such companies often have limited product lines, markets, or financial The Investment Adviser s equity management team selects resources, and their management may lack depth and experience. U.S. companies showing: Such companies usually do not pay significant dividends that could ) Strong potential for shareholder value creation cushion returns in a falling market and their securities may be less ) High barriers to competition liquid than large companies. ) Solid free cash flow generating ability Futures and options involve additional investment risks and ) Excellent capital allocation discipline transactional costs, and draw upon skills and experience which are ) Experienced management aligned with shareholder interests different than those needed to pick other securities. Special risks include: The Investment Adviser seeks out dominant business franchises ) Inaccurate market predictions where the long-term value-creating potential has not fully been ) Imperfect correlation recognized by the market. ) Illiquidity This Fund may also invest in derivative securities including futures, ) Tax considerations options and options on futures and foreign securities. The use of derivative instruments may involve risks different from, In the event the Investment Adviser is unable to identify any or greater than, the risks associated with investing directly in investments that meet the Fund s criteria, the Fund will maintain a securities or other traditional investments. Derivatives may be balance in cash and cash equivalents that may range up to 40% of subject to market risk, interest rate risk, and credit risk. Certain total assets. derivatives may be illiquid, which may reduce the return of the Fund Under adverse or unstable market conditions, the Fund could invest if it cannot sell or terminate the derivative instrument at an some or all of its assets in cash, repurchase agreements and money advantageous time or price. Some derivatives may involve the risk of
Transamerica Premier Focus Fund improper valuation, or the risk that changes in the value of the instrument may not correlate well with the underlying asset, rate or index. As a result of inaccurate market predictions by the portfolio manager, the Fund could lose the entire amount of its investment in a derivative and, in some cases, could lose more than the principal amount invested. Also, suitable derivative instruments may not be available in all circumstances, and there is no assurance that the Fund will be able to engage in these transactions to reduce exposure to other risks. Since the Fund may hold as much as 40% in cash or cash equivalents from time to time, it may not perform as favorably as a fund which is invested more fully. The interest rates on short-term obligations held in the Fund s portfolio will vary, rising or falling with short-term interest rates generally. The Fund s yield will tend to lag behind general changes in interest rate. The ability of the Fund s yield to reflect current market rates will depend on how quickly the obligations in its portfolio mature and how much money is available for investment at current market rates. The Fund could lose money if the issuer or guarantor of a fixedincome security, or the counterparty to a derivative contract, is unable or unwilling to meet its financial obligations. Past Performance The bar chart and the table below provide some indication of the risks of investing in the Fund by showing you how the Fund s performance has varied from year to year, and how the Fund s average annual total returns for different periods compare to the returns of a broad measure of market performance, the Standard & Poor s 500 Composite Stock Price Index ( S&P 500 Index ), a widely recognized unmanaged index of market performance. Absent any limitation of the Fund s expenses, total returns would be lower. As with all mutual funds, past performance (before and after taxes) is not a prediction of future results. Year-by-Year Total Return as of 12/31 Each Year (%) The value of securities owned by the Fund may go up or down, Ð40 sometimes rapidly or unpredictable. Securities may decline in value 98 99 00 01 02 03 04 05 due to factors affecting securities markets generally or particular industries. Best calendar quarter: 43.17% for quarter ended 12/31/98 YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND. 100 80 60 40 20 0 Ð20 84.07% 54.25% (18.60%) (23.92%) (28.18%) 39.54% 15.43% 16.12% Worst calendar quarter: (27.55)% for quarter ended 12/31/00 3 These and other risks are described further in the section entitled Average Annual Total Returns Since Inception (as of 12/31/05)* Life of Explanation of Strategies and Risks in Appendix A of this 1 Year 5 Years Fund** prospectus. Premier Focus Fund Disclosure of Portfolio Holdings A detailed description of the Fund s policies and procedures with respect to the disclosure of the Fund s portfolio securities is available in the Fund s SAI. In addition, investors should note that the Fund publishes its holdings on its website at www.transamericafunds.com 30 days after the end of each calendar quarter. Such information will generally remain online for six months or as otherwise consistent with applicable regulations. Investor Profile The Fund is intended for investors who have the perspective, patience, and financial ability to take on above-average stock market volatility in a focused pursuit of long-term capital growth. Return Before Taxes 16.12% 0.43% 13.23% Return After Taxes on Distributions*** 16.12% 0.21% 12.20% Return After Taxes on Distributions and Sale of Fund Shares*** 10.47% 0.28% 11.66% S&P 500 Index 4.91% 0.54% 5.74% *Actual returns may depend on the investor s individual tax situation and may differ from those shown. After-tax returns may not be relevant if the investment is made through a tax-exempt or tax-deferred account, such as a 401(k) plan or an individual retirement account. **Returns are based on the July 1, 1997 inception date for the Investor Class. ***The after-tax returns are calculated using the historic highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. The S&P 500 Index consists of 500 widely held, publicly traded common stocks. The S&P 500 Index does not reflect any commissions or fees which would be incurred by an investor purchasing the securities it represents. Note: All performance information represents past performance and is not indicative of future results.
Transamerica Premier Focus Fund You should not consider the information contained in the above example a representation of future expenses. The actual expenses Fees and Expenses 4 may be more or less than those shown. The table below provides a breakdown of the expenses you may pay if you buy and hold shares of the Fund. Additional Information Shareholder Fees (fees paid directly from your investment) Maximum Sales Charge (load) imposed on purchases None Maximum Deferred Sales Charge (load) None Redemption Fee on shares held 90 calendar days or less (as a % of amount redeemed) 2.00% Annual Fund Operating Expenses (expenses that are deducted from fund assets*) Advisory Fees 1 0.60% Distribution and Service (12b-1) Fees 0.25% Other Expenses 0.39% Total Annual Fund Operating Expenses 1.24% Expense Reduction 2 0.00% Net Operating Expenses 1.24% 1 Effective May 1, 2008, the Advisory Fee will be subject to a performance adjustment that may either increase or decrease the base fee of 0.60%. For more information regarding the performance adjustment, please see Shareholder Information Advisory Fees. 2 TIM has contractually agreed to waive part of its Advisory Fee and/or to reimburse any other operating expenses for at least ten years or for such shorter time period as the Investor Class Shares are outstanding, to ensure that annualized expenses for the Fund (other than interest, taxes, brokerage commissions and extraordinary expenses) will not exceed 1.40%. This measure may increase the Fund s return. TIM may, from time to time, assume additional expenses. *Fees and Expenses are based upon the Fund s expenses for the fiscal year ended December 31, 2005. Management Investment Adviser: Transamerica Investment Management, LLC 11111 Santa Monica Blvd., Suite 820 Los Angeles, California 90025 Advisory Fee: 0.60% of Average Daily Net Assets* *For more information, see Shareholder Information Advisory Fees. A $25 fee is assessed every year against an account that has been open for over 2 years whose balance is less than $1,000. Example The table below is to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. The example assumes that you make a one-time investment of $10,000 in the Fund and hold your shares for the time periods indicated. The example also assume that your investment has a 5% return each year and that the Fund s operating expenses remain the same as shown above. The example is based on expenses without waivers or reimbursements. The example assumes no fees for IRA accounts. Costs are the same whether you redeem at the end of any period or not. Investment Period 1 Year 3 Years 5 Years 10 Years Premier Focus Fund $126 $393 $681 $1,500
Transamerica Premier Focus Fund Portfolio Managers The managers for the Fund are listed below, followed by a brief biography for each manager. Gregory S. Weirick Portfolio Manager (co) Gregory S. Weirick is Principal, Managing Director and Portfolio Manager at TIM. Mr. Weirick is the Co-Manager of the Transamerica Premier Focus Fund and also manages sub-advised funds and institutional separate accounts in the Small Cap Growth Equity discipline (since August 2005). He joined TIM in 2005 when the firm acquired Westcap Investors, LLC. Westcap was founded by Mr. Weirick in 1992. Prior to Westcap, Mr. Weirick was founder & President of GSW Capital Management and a Security Analyst at Trust Company of the West. He earned a B.A. from the University of Arizona. Joshua D. Shaskan, CFA Portfolio Manager (co) Joshua D. Shaskan is Principal and Portfolio Manager at TIM. Mr. Shaskan is the Co-Manager of the Transamerica Premier Focus Fund (since August 2005). He also manages sub-advised funds and institutional separate accounts in the Small and Small/Mid Cap Growth Equity disciplines. He joined TIM in 2005 when the firm acquired Westcap Investors, LLC. Prior to Westcap, Mr. Shaskan served as an Investment Specialist for three years at Wells Fargo Securities and was also previously a Financial Advisor at Prudential Securities. He earned a B.A. from the University of California, Davis and an M.B.A. from the University of California, Los Angeles. Edward S. Han Portfolio Manager (co) Edward S. Han is Principal and Portfolio Manager at TIM. Mr. Han is the Co-Manager of the Transamerica Premier Growth Opportunities Fund and the Transamerica Premier Focus Fund. He also manages sub-advised funds and institutional separate accounts in the Mid Cap Growth Equity discipline and is a member of the Large Growth team. He joined TIM in 1998. Mr. Han holds an M.B.A. from the Darden Graduate School of Business Administration at the University of Virginia and received his B.A. in Economics from the University of California at Irvine. Kirk J. Kim Portfolio Manager (co) Kirk J. Kim is Principal and Portfolio Manager at TIM. Mr. Kim is the Co-Manager of the Transamerica Premier Focus Fund and manages sub-advised funds and institutional separate accounts in the Convertible Securities discipline. He is also a member of the Mid Cap Growth Equity investment team. Prior to joining TIM in 1997, Mr. Kim worked as a Securities Analyst for The Franklin Templeton Group. Mr. Kim holds a B.S. in Finance from the University of Southern California. The Fund s SAI provides additional information about each manager s compensation, other accounts managed by each manager and each manager s ownership of securities in the Funds. 5
6 Transamerica Premier Equity Fund Objective The Fund seeks to maximize long-term growth. Principal Strategies and Policies The Fund generally invests at least 80% of its assets in a diversified portfolio of domestic equity securities of growth companies of any size. The Investment Adviser looks for companies it considers to be premier companies that are undervalued in the stock market. The Investment Adviser typically invests the Fund s holdings in fewer than 50 well-researched companies. The Investment Adviser uses a bottom up approach to investing. It focuses on identifying fundamental change in its early stages and investing in premier companies. It believes in long-term investing and does not attempt to time the market. The portfolio is constructed one company at a time. Each company passes through a rigorous research process and stands on its own merits as a premier company in the Investment Adviser s opinion. The Investment Adviser buys securities of companies it believes have the defining features of premier growth companies that are undervalued in the stock market. Premier companies have many or all of these features: stock judged to be undervalued may actually be appropriately priced. Growth securities can be volatile for several reasons. Since growth companies usually reinvest a high proportion of their earnings in their own businesses, they may lack the dividends often associated with the value stocks that could cushion their decline in a falling market. Also, since investors buy growth stocks because of their expected superior earnings growth, earnings disappointments often result in sharp price declines. Certain types of growth stocks, particularly technology stocks, can be extremely volatile and subject to greater swings than the broader market. Because the Fund can invest in companies of all sizes, it may be exposed to the risk of investing in small- and medium-sized companies. Investing in small- and medium-sized companies involves greater risk than is customarily associated with more established companies. Stocks of such companies may be subject to more abrupt or erratic price movements than larger company securities. Such companies often have limited product lines, markets, or financial resources, and their management may lack depth and experience. Such companies usually do not pay significant dividends that could cushion returns in a falling market and their securities may be less liquid than large companies. The use of derivative instruments may involve risks different from, ) Shareholder-oriented management or greater than, the risks associated with investing directly in securities or other traditional investments. Derivatives may be ) Dominance in market share subject to market risk, interest rate risk, and credit risk. Certain ) Cost production advantages derivatives may be illiquid, which may reduce the return of the Fund ) Self-financed growth if it cannot sell or terminate the derivative instrument at an ) Attractive reinvestment opportunities advantageous time or price. Some derivatives may involve the risk of ) Leading brands This Fund may also invest in derivative securities including futures, options and options on futures and foreign securities. Under adverse or unstable market conditions, the Fund could invest some or all of its assets in cash, repurchase agreements and money market instruments. Although the Fund would do this only in seeking to avoid losses, the Fund may be unable to pursue its investment objective during that time, and it could reduce the benefit from any upswing in the market. Principal Risks Your primary risk in investing in this Fund is you could lose money. The value of equity securities can fall due to the issuing company s poor financial condition or poor general economic or market conditions. Because this Fund invests in equities, its performance may vary more than fixed-income funds over short periods. The value approach to investing carries the risk that the market will not recognize a security s intrinsic value for a long time, or that a improper valuation, or the risk that changes in the value of the instrument may not correlate well with the underlying asset, rate or index. As a result of inaccurate market predictions by the portfolio manager, the Fund could lose the entire amount of its investment in a derivative and, in some cases, could lose more than the principal amount invested. Also, suitable derivative instruments may not be available in all circumstances, and there is no assurance that the Fund will be able to engage in these transactions to reduce exposure to other risks. The interest rates on short-term obligations held in the Fund s portfolio will vary, rising or falling with short-term interest rates generally. The Fund s yield will tend to lag behind general changes in interest rates. The ability of the Fund s yield to reflect current market rates will depend on how quickly the obligations in its portfolio mature and how much money is available for investment at current market rates. The Fund could lose money if the issuer or guarantor of a fixedincome security, or the counterparty to a derivative contract, is unable or unwilling to meet its financial obligations.
Transamerica Premier Equity Fund Year-by-Year Total Return as of 12/31 Each Year (%) The value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably. Securities may decline in value due to factors affecting securities markets generally or particular industries. YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND. These and other risks are described further in the section entitled Explanation of Strategies and Risks in Appendix A of this prospectus. Disclosure of Portfolio Holdings 100 80 60 40 20 0 Ð20 29.07% 47.51% 33.85% 33.26% (17.62%) (13.81%) (24.43%) 30.70% 15.15% 15.96% A detailed description of the Fund s policies and procedures with respect to the disclosure of the Fund s portfolio securities is available Ð40 in the Fund s SAI. In addition, investors should note that the Fund 96 97 98 99 00 01 02 03 04 05 publishes its holdings on its website at www.transamericafunds.com 30 days after the end of each calendar quarter. Such information will Best calendar quarter: 29.80% for quarter ended 12/31/99 generally remain online for six months or as otherwise consistent Worst calendar quarter: (18.69%) for quarter ended 9/30/01 with applicable regulations. Average Annual Total Returns Since Inception (as of 12/31/05)* 1 Year 5 Years 10 Years Investor Profile Premier Equity Fund The Fund is intended for investors who are willing and financially Return Before Taxes 15.96 1.67 12.26 able to take on stock market volatility and investment risk in pursuit Return After Taxes on Distributions** 15.56 1.60 11.56 of long-term capital growth. Return After Taxes on Distributions and Sale of Fund Shares** 10.90 1.43 10.86 Past Performance S&P 500 Index 4.91 0.54 9.07 The bar chart and the table below provide some indication of the risks of investing in the Fund by showing you how the Fund s performance has varied from year to year, and how the Fund s average annual total returns for different periods compare to the returns of a broad measure of market performance, the Standard and Poor s 500 Composite Stock Price Index (S&P 500 Index), a widely recognized unmanaged index of market performance. Absent any limitation of the Fund s expenses, total returns would be lower. As with all mutual funds, past performance (before and after taxes) is not a prediction of future results. *Actual returns may depend on the investor s individual tax situation. After-tax returns may not be relevant if the investment is made through a tax-exempt or tax-deferred account. **The after-tax returns are calculated using the historic highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Returns before taxes are based on the actual inception date for this class. The S&P 500 Index consists of 500 widely held, publicly traded common stocks. The S&P 500 Index does not reflect any commissions or fees which would be incurred by an investor purchasing the securities it represents. Note: All performance information represents past performance and is not indicative of future results. 7 Fees and Expenses The table below provides a breakdown of the expenses you may pay if you buy and hold shares of the Fund. Shareholder Fees (fees paid directly from your investment) Maximum Sales Charge (load) imposed on purchases None Maximum Deferred Sales Charge (load) None Redemption Fee on shares held 90 calendar days or less (as a % of amount redeemed) 2.00%
Transamerica Premier Equity Fund Additional Information 8 Annual Fund Operating Expenses (expenses that are deducted from fund assets*) Management Advisory Fees 1 0.54% Investment Adviser: Distribution and Service (12b-1) Fees 0.25% Transamerica Investment Management, LLC Other Expenses 0.30% 11111 Santa Monica Blvd., Suite 820 Total Annual Fund Operating Expenses 1.09% Los Angeles, California 90025 Expense Reduction 1 0.00% Net Operating Expenses 1.09% Advisory Fee: 1 The Fund has an expense cap arrangement under which the Fund s Total Operating 0.54% of Average Daily Net Assets* Expenses will not exceed 1.15% of average daily net assets on an annual basis. To the extent that the Total Fund Operating Expenses would exceed the expense cap for the *For more information, see Shareholder Information Advisory Fees. Fund in any month if the maximum Advisory Fee of 0.85% was paid, the Advisory Fee automatically reduces to ensure compliance with the applicable expense cap, Portfolio Manager subject to a minimum Advisory Fee of 0.50% of average daily net assets of the Fund. The manager for the Fund is listed below, followed by a brief If the automatic reduction of the Advisory Fee is not sufficient to maintain an expense cap, the Investment Adviser and/or its affiliates will remit to the Fund an amount biography. that is sufficient to pay the excess amount and maintain the expense cap. For the fiscal year ended December 31, 2005, the Advisory Fee payable by the Fund equals Gary U. Rollé, CFA 0.54% of average daily net assets. For additional information regarding the expense cap in place for the Fund, please see Shareholder Information Advisory Fees. Portfolio Manager *Fees and Expenses are based upon the Fund s expenses for the fiscal year ended Gary U. Rollé is Principal, Managing Director and Chief December 31, 2005. Investment Officer of TIM. Mr. Rollé is the Lead (equity) Manager A $25 fee is assessed every year against an account that has been of the Transamerica Premier Balanced Fund, the Transamerica open for over 2 years whose balance is less than $1,000. Premier Equity Fund, and the Transamerica Premier Diversified Equity Fund. He also manages sub-advised funds and institutional Example separate accounts in the Large Growth Equity discipline. Mr. Rollé joined Transamerica in 1967. From 1980 to 1982 he served as the The table below is to help you compare the cost of investing in this Chief Investment Officer for SunAmerica then returned to Fund with the cost of investing in other mutual funds. The example Transamerica as Chief Investment Officer. Throughout his 23 year assumes that you make a one-time investment of $10,000 in the tenure as CIO, Mr. Rollé has been responsible for creating and Fund and hold your shares for the time periods indicated. The guiding the TIM investment philosophy. He holds a B.S. in example also assumes that your investment has a 5% return each Chemistry and Economics from the University of California at year and that the Fund s operating expenses remain the same as Riverside. shown above. The example is based on expenses without waivers or reimbursements. The example assumes no fees for IRA accounts. The Fund s SAI provides additional information about the manager s Costs are the same whether you redeem at the end of any period or compensation, other accounts managed by the manager and the not. manager s ownership of securities in the Funds. Investment Period 1 Year 3 Years 5 Years 10 Years Premier Equity Fund $111 $347 $601 $1,329 You should not consider the information contained in the above example a representation of future expenses. The actual expenses may be more or less than those shown.
Transamerica Premier Growth Opportunities Fund Objective The Fund seeks to maximize long-term growth. Principal Strategies and Policies The Fund invests in a diversified portfolio of domestic equity securities. Under normal market conditions, at least 80% of the Fund s assets will be invested in equity securities of issuers with market capitalizations of $1 billion to $10 billion at the time of purchase. The Investment Adviser uses a bottom up approach to investing. It studies industry and economic trends, but focuses on researching individual companies. The portfolio is constructed one company at a time. Each company passes through a research process and stands on its own merits as a viable investment in the Investment Adviser s opinion. Companies with small- to medium-capitalization levels are less actively followed by securities analysts. For this reason, they may be undervalued, providing strong opportunities for a rise in value. To achieve this goal, the equity management team selects stocks issued by small to medium U.S. companies which show: ) Strong potential for steady growth ) High barriers to competition ) Experienced management incentivized along shareholder interests The Investment Adviser seeks out the industry leaders of tomorrow and invests in them today. It looks for companies with exceptional management and bright prospects for their products and markets. This Fund may also invest in derivative securities including futures, options and options on futures and foreign securities. While the Fund invests principally in equity securities, the Investment Adviser may also, to a lesser extent, invest in debt securities or other securities and investment strategies in pursuit of its investment objective. Under adverse or unstable market conditions, the Fund could invest some or all of its assets in cash, repurchase agreements and money market instruments. Although the Fund would do this only in seeking to avoid losses, the Fund may be unable to pursue its investment objective during that time, and it could reduce the benefit from any upswing in the market. Principal Risks Your primary risk of investing in this Fund is you could lose money. The value of equity securities can fall due to the issuing company s poor financial condition or bad general economic or market conditions. Because this Fund invests in equities, its performance may vary more than fixed-income funds over short periods. Growth stocks can be volatile for several reasons. Since growth companies usually reinvest a high proportion of their earnings in their own businesses, they may lack the dividends often associated with the value stocks that could cushion their decline in a falling market. Also, since investors buy growth stocks because of their expected superior earnings growth, earnings disappointments often result in sharp price declines. Certain types of growth stocks, particularly technology stocks, can be extremely volatile and subject to greater price swings than the broader market. The value approach to investing carries the risk that the market will not recognize a security s intrinsic value for a long time, or that a stock judged to be undervalued may actually be appropriately priced. This Fund invests mainly in the equity securities of small to medium companies. These securities can provide strong opportunities for a rise in value. However, investing in small- and medium-sized companies involves greater risk than is customarily associated with more established companies. Stocks of such companies may be subject to more abrupt or erratic price movements than larger company securities. Small companies often have limited product lines, markets, or financial resources, and their management may lack depth and experience. Such companies usually do not pay significant dividends that could cushion returns in a falling market. The use of derivative instruments may involve risks different from, or greater than, the risks associated with investing directly in securities or other traditional investments. Derivatives may be subject to market risk, interest rate risk, and credit risk. Certain derivatives may be illiquid, which may reduce the return of the Fund if it cannot sell or terminate the derivative instrument at an advantageous time or price. Some derivatives may involve the risk of improper valuation, or the risk that changes in the value of the instrument may not correlate well with the underlying asset, rate or index. As a result of inaccurate market predictions by the portfolio manager, the Fund could lose the entire amount of its investment in a derivative and, in some cases, could lose more than the principal amount invested. Also, suitable derivative instruments may not be available in all circumstances, and there is no assurance that the Fund will be able to engage in these transactions to reduce exposure to other risks. The value of fixed-income securities may change daily based on changes in interest rates, and other market conditions and factors. Risks include, without limitation: ) Fluctuations in market value ) Changes in interest rates: the value of a fixed-income security generally decreases as interest rates rise 9
10 Transamerica Premier Growth Opportunities Fund ) Length of time to maturity: the longer the duration, the more vulnerable the value of a fixed-income security is to fluctuations in interest rates ) Issuers defaulting on their obligations to pay interest or return principal Investments in foreign securities, including American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs), and European Depositary Receipts (EDRs), involve risks relating to political, social and economic developments abroad, as well as risks resulting from the differences between the regulations to which U.S. and foreign issuer markets are subject. These risks include: changes in currency values; currency speculation; currency trading costs; different accounting and reporting practices; less information available to the public; less (or different) regulation of securities markets; more complex business negotiations; less liquidity; more fluctuations in prices; delays in settling foreign securities transactions; higher costs for holding shares (custodial fees); higher transaction costs; vulnerability to seizure and taxes; political instability and small markets; and different market trading days. The interest rates on short-term obligations held in the Fund s portfolio will vary, rising or falling with short-term interest rates generally. The Fund s yield will tend to lag behind general changes in interest rate. The ability of the Fund s yield to reflect current market rates will depend on how quickly the obligations in its portfolio mature and how much money is available for investment at current market rates. The Fund could lose money if the issuer or guarantor of a fixedincome security, or the counterparty to a derivative contract, is unable or unwilling to meet its financial obligations. generally remain online for six months or as otherwise consistent with applicable regulations. Investor Profile The Fund is intended for investors who have the perspective, patience, and financial ability to take on above-average stock market volatility in a focused pursuit of long-term capital growth. Past Performance The bar chart and the table below provide some indication of the risks of investing in the Fund by showing you how the Fund s performance has varied from year to year, and how the Fund s average annual total returns for different periods compared to the returns of broad measures of market performance. The Fund s primary benchmark, the Russell 2500 Growth Index, and the Fund s secondary benchmark, the Russell Midcap Growth Index, are widely recognized unmanaged indexes of market performance. Absent any limitation of the Fund s expenses, total returns would be lower. As with all mutual funds, past performance (before and after taxes) is not a prediction of future results. Year-by-Year Total Return as of 12/31 each year (%) The value of securities owned by the Fund may go up or down, 20 sometimes rapidly or unpredictable. Securities may decline in value 40 due to factors affecting securities markets generally or particular industries. 98 99 00 01 02 03 04 05 Best calendar quarter: 53.56% for quarter ended 12/31/99 YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND. These and other risks are described further in the section entitled Explanation of Strategies and Risks in Appendix A of this 100 80 60 40 20 0 80.27% 93.99% (26.00%)(22.07%)(18.50%) 33.88% 16.13% 14.36% Worst calendar quarter: (36.17)% for quarter ended 3/31/01 Average Annual Total Returns Since Inception (as of 12/31/05)* Life of prospectus. 1 Year 5 Years Fund** Disclosure of Portfolio Holdings Premier Growth Opportunities Fund Return Before Taxes 14.36% 2.46% 16.45% A detailed description of the Fund s policies and procedures with Return After Taxes on Distributions*** 14.36% 2.30% 15.16% respect to the disclosure of the Fund s portfolio securities is available Return After Taxes on Distributions and Sale in the Fund s SAI. In addition, investors should note that the Fund of Fund Shares*** 9.34% 2.04% 14.46% publishes its holdings on its website at www.transamericafunds.com Russell 2500 Growth Index 8.17% 2.77% 6.10% 30 days after the end of each calendar quarter. Such information will Russell Midcap Growth Index 12.10% 1.38% 7.63%
Transamerica Premier Growth Opportunities Fund *Actual returns may depend on the investor s individual tax situation. After-tax returns may not be relevant if the investment is made through a tax-exempt or tax-deferred account. **Returns are based on the July 1, 1997 inception date for the Investor Class. Example The table below is to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. The example assumes that you make a one-time investment of $10,000 in the Fund and hold your shares for the time periods ***The after-tax returns are calculated using the historic highest individual federal indicated. The example also assumes that your investment has a 5% marginal income tax rates and do not reflect the impact of state and local taxes. return each year and that the Fund s operating expenses remain the The Russell Midcap Growth Index measures the performance of mid-cap growth companies (mid-cap companies with high price-to-book ratios and high forecasted growth values). This index was added on October 3, 2005 as a secondary benchmark to make more meaningful comparisons of the fund s performance relative to the strategy it employs. same as shown above. The example is based on expenses without waivers or reimbursements. The example assumes no fees for IRA accounts. Costs are the same whether you redeem at the end of any period or not. These indexes do not reflect any commissions or fees which would be incurred by an Investment Period investor purchasing the securities represented by such indexes. 1 Year 3 Years 5 Years 10 Years Note: All performance information represents past performance and is not indicative of future results. Fees and Expenses The table below provides a breakdown of the expenses you may pay if you buy and hold shares of the Fund. Premier Growth Opportunities Fund $125 $390 $676 $1,489 You should not consider the information contained in the above example a representation of future expenses. The actual expenses may be more or less than those shown. Shareholder Fees Additional Information (fees paid directly from your investment) Management Maximum Sales Charge (load) imposed on purchases None Maximum Deferred Sales Charge (load) None Investment Adviser: Redemption Fee on shares held 90 calendar days or less Transamerica Investment Management, LLC (as a % of amount redeemed) 2.00% 11111 Santa Monica Blvd., Suite 820 Annual Fund Operating Expenses Los Angeles, California 90025 (expenses that are deducted from fund assets*) Advisory Fees 1 0.60% Advisory Fee: Distribution and Service (12b-1) Fees 0.25% 0.60% of Average Daily Net Assets* Other Expenses 0.38% *For more information, see Shareholder Information Advisory Fees. Total Annual Fund Operating Expenses 1.23% Expense Reduction 2 0.00% Portfolio Managers Net Operating Expenses 1.23% The managers for the Fund are listed below, followed by a brief 1 Effective May 1, 2008, the Advisory Fee will be subject to a performance adjustment biography for each manager. that may either increase or decrease the base fee of 0.60%. For more information regarding the performance adjustment, please see Shareholder Information Advisory Fees. 2 TIM has contractually agreed to waive part of its Advisory Fee and/or to reimburse any other operating expenses for at least ten years or for such shorter time period as the Investor Class Shares are outstanding, to ensure that annualized expenses for the Fund (other than interest, taxes, brokerage commissions and extraordinary expenses) will not exceed 1.40%. This measure may increase the Fund s return. TIM may, from time to time, assume additional expenses. *Fees and Expenses are based upon the Fund s expenses for the fiscal year ended December 31, 2005. A $25 fee is assessed every year against an account that has been open for over 2 years whose balance is less than $1,000. Edward S. Han Portfolio Manager (co) Edward S. Han is Principal and Portfolio Manager at TIM. Mr Han is the Co-Manager of the Transamerica Premier Growth Opportunities Fund and the Transamerica Premier Focus Fund. He also manages sub-advised funds and institutional separate accounts in the Mid Cap Growth Equity discipline and is a member of the Large Growth team. He joined TIM in 1998. Mr. Han holds an M.B.A. from the Darden Graduate School of Business Administration at the University of Virginia and received his B.A. in Economics from the University of California at Irvine. 11
12 Transamerica Premier Growth Opportunities Fund John J. Huber, CFA Portfolio Manager (co) John J. Huber is Principal and Portfolio Manager at TIM. Mr. Huber is the Co-Manager of the Transamerica Premier Growth Opportunities Fund (since August 2005). He also manages subadvised funds and institutional separate accounts in the Mid Cap Growth Equity discipline. Mr. Huber s analytical responsibilities include covering the Financial Services, Producer Durables, Autos and Transportation, and Materials and Processing sectors. He joined TIM in 2005 when the firm acquired Westcap Investors, LLC. Prior to Westcap, Mr. Huber was a Senior Associate at Wilshire Associates and an Information Technology Consultant at Arthur Andersen. He earned a B.A. from Columbia University and an M.B.A. from the University of California, Los Angeles. The Fund s SAI provides additional information about each manager s compensation, other accounts managed by each manager and each managers ownership of securities in the Funds.
Transamerica Premier Diversified Equity Fund Objective The Fund seeks to maximize capital appreciation. Principal Strategies and Policies The Fund uses an intrinsic valuation discipline in selecting securities, based on strong earnings and cash flows to foster future growth, with the goal of producing a long-term, above-average rate of return. At least 80% of the Fund s assets will be invested in a diversified portfolio of domestic equity securities. The Fund typically limits its holdings in fewer than 60 well-researched companies. The Investment Adviser uses a bottom up approach to investing. It studies industry and economic trends, but focuses on researching individual companies. As part of the Investment Adviser s strategy, the portfolio is constructed one company at a time. Each company passes through a rigorous research process and stands on its own merits as a viable investment in the Investment Adviser s opinion. Principal Risks Your primary risk in investing in this Fund is that you could lose money. The value of equity securities can fall due to the issuing company s poor financial condition or adverse general economic or market conditions. As an equity fund, this Fund s performance may vary more than fixed-income funds over short periods. To the extent this Fund limits its holdings, its performance may vary more than funds that hold more securities. Growth securities can be volatile for several reasons. Since growth companies usually reinvest a high proportion of their earnings in their own businesses, they may lack the dividends often associated with the value stocks that could cushion their decline in a falling market. Also, since investors buy growth stocks because of their expected superior earnings growth, earnings disappointments often result in sharp price declines. Certain types of growth stocks, particularly technology stocks, can be extremely volatile and subject to greater swings than the broader market. Because the Fund can invest in companies of all sizes, it may be exposed to the risk of investing in small- and medium-sized In projecting cash flows and determining earnings potential, it uses companies. Investing in small- and medium-sized companies involves multiple factors such as: greater risk than is customarily associated with more established ) The quality of the management team companies. Stocks of such companies may be subject to more abrupt ) The company s ability to earn returns on capital in excess of the or erratic price movements than larger company securities. Such cost of capital companies often have limited product lines, markets, or financial resources, and their management may lack depth and experience. ) Competitive barriers to entry Such companies usually do not pay significant dividends that could ) The financial condition of the company cushion returns in a falling market and their securities may be less The Investment Adviser takes a long-term approach to investing and liquid than large companies. views each investment in a company as owning a piece of the The use of derivative instruments may involve risks different from, business. This Fund may also invest in derivative securities including futures, options and options on futures and foreign securities. To achieve the Fund s goal, the Investment Adviser may invest in securities issued by companies of all sizes. Generally, however, the Investment Adviser will invest in the securities of companies whose market capitalization (total market value of publicly traded securities) is greater than $500 million. Under adverse or unstable market conditions, the Fund could invest some or all of its assets in cash, repurchase agreements and money market instruments. Although the Fund would do this only in seeking to avoid losses, the Fund may be unable to pursue its investment objective during that time, and it could reduce the benefit from any upswing in the market. or greater than, the risks associated with investing directly in securities or other traditional investments. Derivatives may be subject to market risk, interest rate risk, and credit risk. Certain derivatives may be illiquid, which may reduce the return of the Fund if it cannot sell or terminate the derivative instrument at an advantageous time or price. Some derivatives may involve the risk of improper valuation, or the risk that changes in the value of the instrument may not correlate well with the underlying asset, rate or index. As a result of inaccurate market predictions by the portfolio manager, the Fund could lose the entire amount of its investment in a derivative and, in some cases, could lose more than the principal amount invested. Also, suitable derivative instruments may not be available in all circumstances, and there is no assurance that the Fund will be able to engage in these transactions to reduce exposure to other risks. Investments in foreign securities, including American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs), and European Depositary Receipts (EDRs), involve risks relating to political, social and economic developments abroad, as well as risks resulting from the differences between the regulations to which U.S. 13